Brussels, 10/09/2002 (Agence Europe) - the European Commission is worried about certain provisions in the Sarbanes-Oxley Act on audits, currently being prepared in the USA and which might compel European auditing companies to apply rules that conflict with rules in European legislation.
In a letter sent recently to the President of the US Securities and Exchange Commission, Harvey Pitt, Commissioner Frits Bolkestein, stresses that the EU and the USA agree on the need to assure the financial markets and improve the quality of auditing. Nevertheless the Commission is afraid that Section 106 of the Act risked exposing EU auditing firms working with US companies or subsidiaries of companies registered in the US to an excessive amount of bureaucracy. Mr Bolkestein pointed to the fact that Section 106 of the Sarbanes-Oxley Act required EU auditing companies to pay registration fees, apply US rules on auditing and subject themselves to the investigative and disciplinary sanctions of the US authorities. "I am deeply concerned about the risk of exposing EU audit firms to a double regulatory regime which would be excessive, inefficient and disproportionate". The Commissioner is also alarmed by the rules concerning the surveillance authorities' access to foreign audit companies' working documents, which are not even registered in the USA but which have contracts with US companies. "Apart from national professional secrecy laws and regulations that would make it impractical, if not impossible, to obtain access to audit working papers, the European Commission has serious confidentiality concerns over access to such papers outside the EU". Mr Bolkestein has revealed that in another Article of the law the company committee will be responsible for selecting companies for verifying accounts, whilst in several Member States of the EU, auditors are chosen by the shareholders' General Assembly. The Commissioner proposes to meet with the US authorities from now on in order to inform them of current European legislation and the difficulties that the US Act could create.